Funding to be removed for the Contaminated Land Regime. What are the implications for developers?

In December 2013, Lord de Mauley announced to all English local authorities that DEFRA will no longer be supporting the costs of investigating and remediating contaminated land under Part 2A of the Environmental Protection Act 1990.

From 1 April 2014 for a three-year period only £500,000 will be accessible annually for high priority cases. Funding will then completely stop in 2017.

Keith Davidson environmental lawyer at

ELMLawconsiders the implications of the grant fund announcement for developers.

Enforcement under Part 2A

Local authorities have a statutory duty to identify “contaminated land” posing unacceptable risks to human health and to then secure remediation. Contaminated Land Officers usually apply to the Defra capital grants scheme to pay for site investigations and remediation work.

The budget for the scheme has already undergone significant cuts, decreasing from £17.5 million in 2009/10 down to £2m for 2013/14. Reducing the funding from April 2014 and then stopping the funding in 2017 will seriously impact the Council’s Part 2A enforcement plans.

Industry reaction

The Chartered Institute of Environmental Health “sharply condemned the decision to cease funding local authority action on toxic sites which are potentially harmful to human health”.

Principal policy officer Howard Price said: “Some of those old industrial sites have since been turned over to housing and some present unacceptable risks to their new owners and their families. But without financial support from the government, local authorities cannot even identify them, let alone ensure they are cleaned-up.

“The move, at a stroke, effectively negates the statutory duty given to councils by Parliament.”

East Cambridgeshire District Council scientific officer Marcus Bell was not entirely surprised by the announcement, in view of heavy budget cuts year-on-year since the current government came to power. He told the

Environment Analyst:

“Simply reducing the budget without any other supporting actions does not appear to be the most effective use of resources and may nullify the implementation of Part 2A.

“A local authority shouldn’t rely on the possibility of grant funding to implement legislation which it is statutorily obliged to do so, and which is aimed at the polluter paying. But having the safety net of capital funding presents more security and therefore desire for a local authority to root out the most contaminated sites.

“In the current economic climate, councils are struggling to stay afloat as it is. For a CLO to present their authority with a possible £100,000+ remediation bill is not going to be welcomed.”

Implications for developers

As a result of the removal of the grant, there is likely to be greater technical scrutiny of remediation proposals through the planning regime. While Part 2A can still be used as a threat by Contaminated Land Officers, they will have no firepower to commission site investigations, so there will be less enforcement at high-risk sites.

Local authorities will need to focus on achieving better clean-up through planning controls and this could increase overall remediation costs.

It is now even more important for developers to have the right technical, insurance and environmental liability protections in place, and they should consider the following factors:

1.        Choice of environmental consultant and remediation contractor.

  • With the EA now charging developers £85 per hour for detailed advice in relation to planning applications, make sure you have picked the best consultants
  • Have they SiLC qualifications?
  • Do they have in house laboratory testing to save costs and speed up reporting times?
  • Have they secured £10 million Professional Indemnity and Public Liability insurance cover for remediation projects?

2.        Contractor Pollution Liability insurance is needed to cover any losses arising from the remediation and construction activities

3.         Environmental liability contractual protections

  • Deed of appointment to replace consultant terms and conditions
  • Correct use of statutory exclusion tests and agreements on liability
  • Environmental insurance policy wording

In conclusion, the removal of grant funding will have a major effect on local authorities’ ability to secure remediation through the Part 2A contaminated land regime. The spotlight will now be on developers and the remediation proposals submitted through the planning regime.

Developers will need to ensure that they have in place appropriate technical, insurance and environmental liability protections and that all of these protections are both fully watertight and up to date.

For more information about the Part 2A regime, or to discuss any of the points set out in this post, please do not hesitate to contact Keith on 07827 353652 or via email.

Keith Davidson is founder of ELM Law, a specialist environmental law practice that advises on contaminated land transactions and regeneration projects. He acts as an environmental law consultant for Ratio Law




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